Банкеръ Weekly

Briefs

SOCIAL PARTNERS SMOKE THE PIPE OF PEACE

After more than eight months of hard negotiations, syndicate organisations, the business and the State at last came out with a document, including the principles for the development of Bulgaria's economic and social sector till the year 2009. Hours before the second monitoring report of the European Commission (EC) was made public on September 26, the pact for cooperation between the three sides was signed by PM Sergey Stanishev, syndicate leaders Zhelyazko Hristov from the Confederation of Independent Trade Unions in Bulgaria (CITUB) and Konstantin Trenchev from the Podrkepa Labour Confederation, and the leaders of the Bulgarian Industrial Association, the Chamber of Commerce and Industry, the Union of Private Economic Enterprise, the Vazrazhdane Union of Private Entrepreneurs, the Association of Industrial Capital, and the Confederation of Employers and Industrialists.
The pact is an important public agreement, aiming at our country's practical integration into the European Union through the achievement of a better competitiveness of Bulgaria's economy, a higher economic growth and education and healthcare of higher quality, Premier Stanishev said after the ceremony. Employers, on their side, did not conceal the compromises they have made in order to realize that cooperation, but united around the stance that the agreement was good enough to impose the European social model in our country. For instance, the initial idea of a fixed formula for setting the annual increase of salaries has dropped from it. However, the mechanism for raising incomes, depending on inflation, economy's competitiveness, and changes in taxation and social insurance, has been maintained. One of the document's major virtues is that it is accompanied by an ordinance on the formation of the working salary and regulated transformation of the classes for length of service, Zhelyazko Hristov noted. Although the International Monetary Fund recommended a year ago elimination of these classes, they are still present in the new agreement, but in the form of additional bonuses for length of service and professional experience, to be set when closing the collective labour contracts. At the same time, the so-called transference of classes when the work is changed will be eliminated, because you can't get money for your professional experience if you are a dressmaker and you become a waitress afterwards, Mr. Hristov explained.
The other positive change, projected in the agreement, is the opening of 240,000 new working positions, which will lower unemployment rate below 9% till 2009. These intentions could not but be mentioned by Social Minister Emiliya Maslarova who outlined several more advantages of the pact for the BANKER weekly. The commitment to raise the employment coefficient above 60% is more than praiseworthy, because it will allow us to keep in step with the Lisboa strategy of the European Union. A very good decision as well is the one that not less than 8% of the employed in the sphere of education should be entitled to qualify and requalify, she said. Ms. Maslarova supported also the syndicates' demand for raising the minimum working salary to BGN180 as of next year. According to her, a promising initiative is the decision that the minimum pension for insured length of service would be at least half of the minimum monthly wage which is currently BGN160. Moreover, social pensions for old age will be bound with the official poverty line, expected to be around BGN152.
However, employers believe that an increase of the minimum incomes without raising the average working salary is quite risky as that would deprive people of a stimulus for a higher qualification and education. If we want an educated nation the minimum wage should always be 50% lower than the average salary, which is a basic principle in terms of competition, Bozhidar Danev, Chairman of the Bulgarian Industrial Association, said. In his words, the minimum income should not be fixed by decrees and ordinances, but is to be regulated by the size of the average remuneration.
The business, on its part, insisted that the corporate tax be cut down from the 15% to below 10 per cent. Its stance is that the risk would be paid off multiple times by higher collectability of taxes, increased proceeds, more new working positions, and more foreign firms that would move their operations into Bulgaria.
Independent of the well-outlined fair prospects to the Bulgarian economy, the pact for cooperation has a major flaw, pointed out by everybody. It does not contain a single agreed figure, but just the main principles for development till 2009. Employers commented that was due to the difficult transition from a currency board arrangement to EU-membership, which Bulgaria has undergone.

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